CVS

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CVS Health will split into two public companies by 1H 2028, separating its pharmacy and health services businesses in a tax-free transaction. I estimate intrinsic value at $90–$100 per share, 13–25% above current levels, based on sum-of-the-parts analysis and 2026–2027 guidance. CVS guides 2026 adjusted EPS to at least $8.20, with a 2027 floor of $8.65, and resumes buybacks with $11.5B authorized.

CVS' recent decision to divide its retail pharmacies from its insurance and pharmacy-benefit operations has raised hopes of consumer savings as Americans continue to reel from high costs of living.

CVS plans to separate its retail pharmacy business by 2028 as stronger Q3 earnings, raised 2026 guidance and Aetna's recovery shape its outlook.

Divesting the company's business units into smaller segments could have significant implications.

A pipeline operator, a tower REIT, a chicken giant, and a healthcare conglomerate each get an equal slice of $25,000.

CVS Health Corp (CVS) remains a long-term buy, with shares deeply undervalued despite recent volatility and a planned business split. Q3/26 results exceeded expectations: revenue grew 5.4% to $108.4B, adjusted EPS rose 30.7% to $2.09, and guidance was raised. CVS will split into two public companies—CVS Health (insurance, PBM, care) and CVS Pharmacy (retail, clinics)—by H1 2028, aiming for agility and efficiency.

Margin recovery across the insurance/retail pharmacy segments underscore CVS' successful turnaround story, as they hint at double-digits EPS growth through FY2028. These are thanks to the new management team's disciplined insurance underwriting/pricing actions and the retail pharmacy's improved affordability. The separation introduces near-term noise/restructuring costs, but may unlock value by enabling the retail pharmacy to compete more freely while addressing PBM regulatory scrutiny.

CVS Health NYSE: CVS plans to separate its retail pharmacy operations from its insurance and pharmacy services businesses, creating two publicly traded companies in a transaction expected to close in the first half of 2028.

CVS Health breakup will create separate pharmacy and health care companies as industry expert weighs the impact on prescription drug prices, pharmacies and patients.